Feb. 21 (Bloomberg) -- Malaysian opposition leader Anwar
Ibrahim, who was jailed for corruption and sodomy, predicted a
smooth transition when his coalition ousts the government that
has ruled Malaysia for 55 years in elections that may be held
within weeks.

“The police has changed in the last few months,” Anwar,
65, said. “There’s hardly been any harassment from the police
in all our programs. It’s a pure change.”

Anwar said the election will be close and will be won in
the rural battleground states of Sabah and Sarawak. He said the
ideological differences in his alliance won’t derail the success
of the coalition in an hour-long interview at his People’s
Justice Party headquarters in Petaling Jaya, outside Kuala
Lumpur. Prime Minister Najib Razak must dissolve parliament by
April 28 and hold elections within 60 days.

A victory by the opposition, after the governing National
Front had its narrowest win five years ago, would end more than
five decades of unbroken rule in Malaysia. The FTSE Bursa
Malaysia KLCI Index has fallen 4.7 percent since reaching a
record Jan. 7 on concern the ruling National Front may slip
further at the ballot box, making it the only Asian benchmark
stock index that has dropped this year.

Anwar, who said his imprisonment was politically motivated,
considers his acquittal in 2012 on a second sodomy charge an
indication that the judiciary will accept the outcome of the
election, even if the opposition triumphs. He also said that the
police didn’t obstruct an opposition rally in Kuala Lumpur last
month and helped to “facilitate” it.

Last Chance

While the opposition hasn’t announced who would head a
government if it wins, Anwar said “it is widely expected or
assumed” it will be him.

Since his release from prison in 2004, Anwar has taken
charge of an ideologically disparate and multi-ethnic opposition,
pledging to roll back racial preferences for the ethnic Malay
majority and trim the budget deficit if he wins power. His
People’s Alliance coalition, which includes the Pan-Malaysian
Islamic Party that wants to enforce Shariah law and the
Democratic Action Party, won five of 13 states in the 2008
election before losing one a year later when three state
assembly members defected.

“This is his last chance to be prime minister,” said
James Chin, a professor of political science at the Malaysian
campus of Australia’s Monash University, referring to Anwar.
“Part of it is age. The other part is that the alliance he
holds is more of a marriage of convenience.”

Chinese Voters

Najib’s approval rating slid to 63 percent in December, the
lowest level in 16 months, with support among ethnic Chinese
voters, who make up about a quarter of Malaysia’s 29 million
people, declining to 34 percent, the Merdeka Center for Opinion
Research said last month. The survey of 1,018 voters conducted
Dec. 15-28 on the country’s peninsula and published Jan. 10,
showed 45 percent of respondents said they were “happy” with
the government.

The ringgit has fallen 1.6 percent against the dollar this
year, after strengthening 3.8 percent in 2012.

“An opposition win would be destabilizing for the market
in the short term,” Alan Richardson, a Singapore-based fund
manager who helps oversee about $110 billion for Samsung Asset
Management Co., said by phone. “We haven’t had a history of
political transition in Malaysia and there will be
uncertainty.”

Rural Heartland

Anwar said he was confident his opposition alliance would
make gains in Malaysia’s rural heartland of Sabah and Sarawak,
which has long been the stronghold of the National Front.
Najib’s coalition won 55 out of 71 seats when Sarawak held its
state election in April 2011.

“In Sabah and Sarawak, we’ve never seen that level of
support among indigenous tribes,” he said. “People do concede
that there’s going to be a substantial change in Sabah and
Sarawak, enough to alter the shift in balance of power
nationwide.”

Anwar’s alliance holds 75 of 222 parliamentary seats, while
the National Front, known as Barisan Nasional, holds 137 seats,
according to the Malaysian parliament website. The election will
be “very soon,” Bernama reported Feb. 15, citing Najib.

Anwar backed mass demonstrations last year and in 2011 that
were organized by the Coalition for Clean and Fair Elections, or
Bersih, to demand changes to the country’s voting laws. At one
of the gatherings in April, police arrested more than 500 people
for defying a ban on street protests introduced by Najib’s
government a month earlier.

Indelible Ink

The government has acceded to some of the demands. The
Election Commission will use indelible ink for the first time to
mark voters’ fingers to prevent double counting. Bersih’s call
for a minimum 21-day campaign period hasn’t been met.

Najib, 59, passed a security law last year that reduced the
period a detainee could be held without a judicial review. He
also changed media legislation, making licenses permanent rather
than subject to annual renewal.

Anwar said he is committed to dismantling “obsolete”
policies that benefit ethnic Malays and indigenous people, and
which were put in place by Najib’s father, Abdul Razak Hussein,
who was Malaysia’s second prime minister. Since taking office in
April 2009, Najib has peeled back benefits to ethnic Malays,
easing rules on foreign investment and property purchases.
Ethnic Malays and indigenous peoples of Sabah and Sarawak
comprise more than half the country’s population, according to
government data.

Cash Handouts

Najib will be counting on a series of election sweeteners,
as well as economic growth that has exceeded 5 percent for six
consecutive quarters, to sway voters. His proposed 251.6 billion
ringgit ($81.3 billion) budget for this year includes cash
handouts for low-income families and higher pensions for civil
servants. Inflation, which rose 1.3 percent in January from a
year earlier, is the lowest among major economies in Southeast
Asia.

Anwar served as deputy prime minister from 1993 to 1998
under Prime Minister Mahathir Mohamad, who ruled Malaysia from
1981 to 2003. He was removed from office and tried in 1998 for
abuse of power and having sex with a man, which is an offense in
Muslim-majority Malaysia and carries a maximum sentence of as
much as 20 years in prison. He was jailed for almost six years
before the sodomy charge was overturned.

Anwar was cleared of the second sodomy charge in January
last year after the High Court ruled there was no evidence to
corroborate the claims made by a former aide of a sexual
encounter in 2008. The public prosecutor is seeking an appeal
against the acquittal.